Gold and silver prices bounced back on the last day of the week, but didn’t do much during last week when examining their performance on a weekly scale. Currently gold and silver are trading rising. Today, U.S. pending home sales report will be published, Bernanke will give a speech (update: Bernanke stated in his speech that the labor market is still weak – this news may drive gold and silver prices up on speculation of another stimulus plan in the future), Draghi will also talk, and German Business Climate Survey will come out.
Here is a short forecast on gold and silver prices for Monday, March 26th:
Gold and Silver– March Update
Gold price sharply rose on Friday by 1.21% to $1,662; silver also traded up by 2.96% to $31.35. During March, gold declined by 2.86% and silver by 6.84%.
The chart below presents the developments of gold and silver prices during the month so far (prices are normalized to February 29th).
The ratio between gold and silver fell to 51.51. During the month the ratio rose by 4.28% as silver has underperformed gold. In the chart below are the changes in this ratio during the month.
On Today’s Agenda
Bernanke Speech: following the FOMC meeting the Chairman of the Federal Reserve will give a speech regarding the US labor market that may affect the direction of forex and commodities markets. If he will provide big headlines from this speech it could have a big effect on gold and silver prices;
U.S. Pending Home Sales: This report shows the changes in pending home sales in the U.S. for February 2012; in the recent report the pending home sales index rose by 2% compared with the previous month’s index; based on last week’s reports on housing sales (new and existing) the pending sales may also decrease. In such a case U.S dollar may weaken;
German Business Climate Survey: This survey estimates the developments (on a monthly basis) of the business climate of Germany. If this report will continue to be positive, it may positively affect the Euro;
ECB President Draghi Speaks: Following the March ECB rate decision in which the rate remained at 1% the President of the ECB will give a speech. He may refer to the recent Greek debt crisis and the progress of the EU economy. His speech may influence the direction of the Eur/USD currencies pair;
Forex / Gold & Silver Market – March
The Euro/U.S Dollar rose on Friday by 0.52% to 1.327. During March Euro/U.S Dollar decreased by 0.41%; furthermore, the Australian dollar Canadian dollar also appreciated against the U.S. dollar by 0.72%, and 0.14%, respectively. The Aussie dollar and Euro were historically linearly correlated with the daily percent changes of gold and silver prices. If the Euro/USD and AUD/USD currencies pair will continue to rally today then they may indicate gold and silver may also trade up. Currently, the Euro/USD is slightly falling.
Current Gold and Silver Prices March 26th
Gold (April 2012 delivery) is traded at $1,678 per t oz. a $15.6 or 0.94% increase as of 13:36*.
Silver (April 2012 delivery) is at $32.64 per t oz – a $0.36 or 1.14% increase as of 13:36*.
(* GMT)
Daily Outlook and Analysis
Gold and silver prices continue to zigzag with an unclear trend during last week. This week precious metals might continue this unclear trend. The upcoming speech of Bernanke and the U.S pending home sales might affect the prices of gold and silver if there will be major headlines coming out of this speech or report or both.
Here is a reminder of the top events and reports that are planed for today and tomorrow (all times GMT):
Today
09:00 – German Business Climate Survey
13:00 – Bernanke Speech
15:00 – U.S. Pending Home Sales
17:00 – ECB President Draghi Speaks
Tomorrow
15:00 – U.S Consumer Confidence
17:45 – Bernanke Speech
For further reading: